US wireless spectrum auction bidding raises $19.6b

The US Federal Communications Commission said late on Friday that bidding in the wireless spectrum auction has ended at $19.6 billion, significantly less than many analysts had initially forecast.

The so-called broadcast incentive spectrum auction is one of the commission’s most complex and ambitious to date and should be complete by April.

The FCC said last year that 62 bidders made upfront payments to take part, including AT&T, Verizon Communications, Dish Network, T-Mobile US and Comcast.

Of the nearly $20 billion raised, more than $6 billion will go to reduce the US deficit, more than $10 billion will go to broadcasters that chose to relinquish spectrum rights, and up to $1.75 billion for other broadcasters that incur costs in changing channels.

The final price for 84 megahertz of spectrum could rise above $20 billion as buyers may hike final bids for specific frequency blocks before the sale is complete.

In June, the FCC said sellers had initially sought $86.4 billion for 126 megahertz of television airwaves taken from broadcasters to be sold for wireless use.

Many analysts had expected broadcasters to earn substantially more in the auction, with some forecasting in 2016 $30 billion in proceeds.

Twentieth-First Century Fox’s Fox Television unit said this week it would receive about $350 million in proceeds from spectrum sales.

Tribune Media said it expects $190 million in proceeds from the auction.

Gray Television Inc said it expects to receive $90.8 million and Sinclair Broadcast Group Inc expects to receive $313 million. Others did not participate.

E. W. Scripps Co said Friday it had opted not to take part because it thought prices were too low.

FCC Chairman Ajit Pai said the closing of bidding is a “major milestone,” adding the spectrum will boost wireless service.

“These low-band airwaves will improve wireless coverage across the country and will play a particularly important role in deploying mobile broadband services in rural areas,” Pai said.

The spectrum will transition over 39 months. Some stations will transition to a new band and a new channel, while others will move off-air. Those going off the air must give at least 30 days notice.

Many public TV stations also took part in the auction.

FCC Commissioner Michael O’Rielly raised concerns about the auction. He said it was not a “failed auction” but said “significant review is necessary to understand how the FCC rules and auction design impacted the results.”